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County funding issues and solutions

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This past summer I served on the interim County Government study committee. We learned, that with 66 different counties there are 66 different sets of problems and concerns, and that one size does not fit all. However, several key themes emerged from our study and the committee brought forth a package of bills to address these issues.

One of the areas that received the most public testimony during our interim meetings was the fact that expenses continue to rise rapidly for law enforcement, courts, and jails. SB2 was introduced to help counties address that concern. This bill redirects some of the alcohol beverage tax from the state’s general fund to counties. The alcohol beverage tax raises about $14 million each year; three-fourths of it goes to the state, and the other fourth is divided among municipalities. The counties pointed out that expenses for alcohol-related crimes fall largely on counties and cities, not the state. SB2 passed the Senate earlier this week, to redirect how the tax is allocated: half to the state, and one-fourth each to cities and counties. The county portion would be specifically for law enforcement, jails, state’s attorneys, public defenders, and court-appointed attorneys. Although the bill was opposed by the governor’s office – it would mean a decrease of about $4 million to the state general fund – it passed on a vote of 28-5 and is headed to the House.

Another bill brought by the committee, HB1005, deals with fees that counties can charge for certain services. The bill repeals some obsolete fees (some were implemented in the 1880s) and increases fees that county treasurers can charge for various licenses, many of which were last adjusted about 25 years ago. The bill also increases fees that sheriffs can charge for civil process proceedings. Although each county is different, in general the fees sheriffs can charge for such things as serving summons or subpoenas covers less than half the cost of providing the actual service.

The counties point out that these types of fees are paid for by the people who actually use the service, helping relieve the burden on property tax payers who may not benefit from those services. No other level of government is more dependent on property taxes than the counties. Statewide, counties receive about 58% of their revenue from property taxes. This source of revenue is subject to property tax limitations enacted in 1995. It is important to keep in mind that when you pay your property taxes, the counties keep on average about 26%. Schools get 57% of all property taxes collected, and cities get 13%. Townships and special purpose districts each get about two percent.

These two bills are only a small step in helping locally-elected county commissioners fulfill their statutory obligations and meet the needs of their county. Much more work is needed in this area.

Please feel free to contact me with comments or questions at rep.duvall@state.sd.us or maryduvall@midco.net